Swain auditor warns that drastic measures needed

An auditor for Swain County had a clear-cut message to pass on to commissioners this week: make drastic cutbacks in expenditures or hike property taxes.

“There’s nothing left,” Auditor Eric Bowman told commissioners at their meeting Monday (Oct. 5). “We can’t have another year like this year. I realize that’s not good news, but that’s just the reality of the situation.”

Bowman’s official summary states that the county should “strongly consider” a property tax increase. Swain has one of the lowest property tax rates in the region. The findings are a result of Bowman’s audit of Swain County’s budget for the 2008-2009 fiscal year, which ended June 30.

County Manager Kevin King would not comment on the budget crisis following the meeting. However, in an article last month, King said there would be no problem in turning the situation around.

“It is not as dire as everybody is painting,” King said then.

Bowman singled out the sheriff’s department and the health department in his report to the commissioners, recommending more oversight for both.

The health department is two months behind in billing Medicaid for nursing care provided to home-bound seniors, delaying reimbursements the county is due for the services being provided under the program.

Meanwhile, food costs at the jail escalated dramatically by 49 percent for no apparent reason. Bowman said he was unable to determine why there was such a jump in the cost of food, especially at a time when jail revenues fell sharply.

In fact, the jail faced some of the biggest drops in revenue, as did sales tax and construction-related inspection fees.

Bowman also alerted the commissioners that there was a misuse of the county credit card in the sheriff’s department for “several personal type items.”

Cut costs, don’t raise taxes

Despite Bowman’s recommendation, Commissioners Steve Moon and David Monteith said they would not support an increase in property taxes.

“We cannot continue to overspend,” said Moon. “We can take care of it by cutting expenses. Nobody wants to raise taxes.”

Moon agreed with the auditor that there must be better oversight and said pointing out the sheriff’s department’s role in increasing county expenses was “very, very relevant.” Moon added that elected officials are “not always qualified” and sometimes “spend way too much.” The position of sheriff is elected and carries no specific qualifications or resume other than approval by voters.

“Vote for him again, see what happens,” said Moon.

Sheriff Curtis Cochran could not be reached for comment.

Meanwhile, Monteith said there was no need to increase taxes to make up for the budget shortfall.

“I think we need to tighten our belt real tight,” said Monteith. “I will, under no circumstance, increase taxes. We don’t have to.”

Monteith said the loss in jail revenues was inextricably tied to neighboring counties that once paid Swain to house their overflow inmates — building jails of their own. In addition, Swain had made money housing federal inmates but those are now being sent to Buncombe County rather than Swain.

Monteith showed sympathy to the sheriff, stating that he “inherited” a jail that was bigger than necessary. Commissioners made the decision to overbuild the jail in hopes of housing inmates for neighboring counties prior to Cochran taking office. According to Monteith, the county should now explore what else could be done with that space to bring in some extra dollars.

The county has already cut half a million from its budget this year over last year. The county froze overtime and cut eight jobs: five in the sheriff’s office and jail and three from other departments. The cost saving measures went into effect with passage of the new budget July 1.

Realizing that wouldn’t be enough, however, commissioners last month announced a five-day furlough without pay for the county’s nearly 200 employees, netting $100,000 in savings. Another $100,000 came out of a capital reserve account used for school maintenance and construction.

Where the money went

Even though county revenues fell by $479,000, Swain spent $1.3 million more in 2008-2009 than the prior year, with the biggest increases racked up in the Sheriff’s department, the jail, and debt payments primarily related to the jail.

Some of the jail expenses dealt with a rise in food costs, but there was also additional staff approved by commissioners to operate the large jail.

The County’s total general fund balance decreased from $4.3 million to $2.8 million, while its unreserved general fund balance dropped drastically from 17.3 percent in 2008 to 6.6 percent last year.

The Local Government Commission recommends counties maintain a cushion of 8 percent of their annual budget — enough to cover one month’s operating expenses. Since Swain falls below that benchmark, the N.C. Department of Revenue will oversee the county’s budget until the situation is corrected.

King had said the county had to make up $1 million to get over the LGC fund balance mandate.

In working toward that goal, Bowman recommends reviewing food menus at the jail, handing over control of certain funds from the sheriff to the county finance director, and requiring two people, rather than just the jailer, to handle inmates’ money.

He also emphasized the need for all department heads to be educated on cutting costs.

Vida Cody, Swain County’s finance officer, said she was already working with Sheriff Curtis Cochran to cut expenses. According to Cody, Cochran has someone else handle meal purchases for the jail. Some of the other expenses in that department dealt with vehicle maintenance, an expense Cody said couldn’t be helped.

Cody said she also plans to meet with the health department’s finance personnel in the near future.

Despite no one directly raising any suspicion of a possible mishandling of county funds, Cody emphasized repeatedly that she follows county money closely, inviting the public to look at finance records to see for themselves.

“We watch every invoice that comes through,” Cody said.

Meanwhile, Mike Clampitt, chairman of the Swain County Republican party, criticized the county for imposing mandatory furloughs on county employees.

Rather than revolving furloughs, the county plans to shut down on certain days, one of them being Dec. 31. Clampitt challenged that choice since many people pay taxes and file property information with the register of deeds that day before year’s end.

“December is the worst month in hell to take somebody’s pay whether you’re rich or poor,” said Clampitt. “Most people celebrate Christmas with family and friends. They like to have a meal. It’s the only time of the year they get together.”

Clampitt said he could count on one hand the number of commissioner’s meetings he’s missed and could see clearly where the problem with the budget lay.

“You spent money hand over first for the last three years,” said Clampitt. “There’s no two ways about it.”